al@mot.UUCP (Al Filipski) (09/06/85)
Can anyone explain to me the marketing purpose behind coupons and
rebates? Why do manufacturers want people to do the idiot-level
work of cutting out and organizing coupons, or, worse yet, filling
out rebate applications and sending them in in return for little
checks in the mail? WHY DON'T THEY JUST LOWER THE %&##@! PRICES?
How stupid and idle do they think people are? How much time is spent
in this country in the utterly non-productive non-creative activities
of clipping, handling, processing, mailing, etc. these stupid pieces of paper?
--------------------------------
Alan Filipski, UNIX group, Motorola Microsystems, Tempe, AZ U.S.A
{seismo|ihnp4}!ut-sally!oakhill!mot!al
ucbvax!arizona!asuvax!mot!al
--------------------------------ark@alice.UucP (Andrew Koenig) (09/09/85)
> Can anyone explain to me the marketing purpose behind coupons and > rebates? Why do manufacturers want people to do the idiot-level > work of cutting out and organizing coupons, or, worse yet, filling > out rebate applications and sending them in in return for little > checks in the mail? WHY DON'T THEY JUST LOWER THE %&##@! PRICES? Simple. 1. If they lower prices, eventually people get used to the new prices and no longer feel they're gettin a bargain. 2. It's hard to raise prices without people noticing. But if a rebate quietly expires, people accept it more readily. 3. By putting a cut-off date on a coupon offer, a vendor can make it plain that if you don't buy their widget by a particular time, it will cost more. 4. Some people lose the coupons or forget to send in for the rebates, which saves money for the vendor.
wiso@ihnss.UUCP (Jack Wisowaty) (09/09/85)
By offering rebates and coupons companies provide themselves with several marketing advantages: 1) Advertising can indicate the lower price (after rebate), but people like you who are offended by rebates or people like me who forget to mail things may not receive that lower price. So they can entice you with a low price without providing the low price in some cases. 2) They can in essence increase the price of an item simply by withdrawing the rebate. This is supposedly less offensive to consumers than a "real" price increase. Retailers like it because they don't have to reprice items on the shelves since the base price doesn't change. 3) By offering a limited time rebate, companies can attract buyers who may not have purchased otherwise. With a simple price lowering there is no incentive to buy quickly, waiting will not cost them anything and may see an even further price reduction. But knowing that the price will go up (rebate ends) after a specific date is a strong incentive to buy now! Jack Wisowaty ihnp4!ihnss!wiso
miles@vax135.UUCP (Miles Murdocca) (09/09/85)
> Can anyone explain to me the marketing purpose behind coupons and > rebates? Why do manufacturers want people to do the idiot-level > work of cutting out and organizing coupons, or, worse yet, filling > out rebate applications and sending them in in return for little > checks in the mail? WHY DON'T THEY JUST LOWER THE %&##@! PRICES? > How stupid and idle do they think people are? How much time is spent > in this country in the utterly non-productive non-creative activities > of clipping, handling, processing, mailing, etc. these stupid pieces of paper? By using factory rebates, the seller can charge a markup on a larger base price. If the end price was reduced instead, it might not be worthwhile for the seller to devote shelf space to the product. Also, some rebates come out AFTER the product has been sold to the stores, so the rebate helps the product to move (as a manufacturer's afterthought). Miles Murdocca, 4B-525, AT&T Bell Laboratories, Crawfords Corner Rd, Holmdel, NJ, 07733, (201) 949-2504, ...{ihnp4}!vax135!miles
dan@mgweed.UUCP (Daniel Gray) (09/09/85)
[ save line eaters for valuable gifts... ] One of the primary reasons for rebates began when there was a real possibility that the government was going toward a policy of price-freezing. The rebates allowed the manufacturers to give the consumer a better price without lowering their prices. If prices were frozen, they would be high and when the rebates ended, anyone who bought the product paid a higher price. This is a built-in profit.... Now I suspect that this is just advertising nonsense.... Daniel Gray -- ihnp4!mgweed!mgbase!dan
john@frog.UUCP (John Woods) (09/09/85)
> Can anyone explain to me the marketing purpose behind coupons and > rebates? Why do manufacturers want people to do the idiot-level > work of cutting out and organizing coupons, or, worse yet, filling > out rebate applications and sending them in in return for little > checks in the mail? WHY DON'T THEY JUST LOWER THE %&##@! PRICES? > How stupid and idle do they think people are? How much time is spent > in this country in the utterly non-productive non-creative activities >of clipping,handling,processing, mailing, etc. these stupid pieces of paper? > ucbvax!arizona!asuvax!mot!al This is an interesting question. (From my understanding,) The manufacturers would, in fact, like to bag these idiot coupons and just lower (and raise) prices en masse. Totalling handling and fraud costs, a $0.25 coupon can cost the manufacturer $0.50 or more. However, they have found that there are a great many people who expect to have coupon sales, and who will just not respond as well to dropping the price an equal amount. This is one of the (few) instances where manufacturers would like to assume that the public are not idiots, but, like the little old ladys on Monty Python, have discovered that we *are* idiots. Excuse me, I have to go nail my hand to the back of a lorry... -- John Woods, Charles River Data Systems, Framingham MA, (617) 626-1101 ...!decvax!frog!john, ...!mit-eddie!jfw, jfw%mit-ccc@MIT-XX.ARPA "Out of my way, I'm a scientist!" - War of the Worlds
venky@pitt.UUCP (Venkatesan) (09/10/85)
> > Can anyone explain to me the marketing purpose behind coupons and > rebates? I think the real reason is that they think many of us would forget sending the rebate form(s), etc. after we buy. Most of them require original cash register receipt preventing us from returning the merchandise if we don't like the stuff after sending the receipt to the manufacturer. Often, we displace receipts which are required for the rebate thus we pay more for the stuff and the profit goes directly to the manufacturer. Many of us are also too lazy to mail coupons after we buy. Sometimes, the postage that we pay forms a significat part of the rebate (like in the case of detergents) May be someone may think of more reasons.
singhal@hound.UUCP (S.SINGHAL) (09/10/85)
One more reason why manufacturers offer rebates. This is a "free" way for them to get names and addresses of their customers. What a powerful mailing list ! If you have ever wondered how you keep getting so much junk mail, this is one reason.
gordon@cae780.UUCP (Brian Gordon) (09/10/85)
In article <243@mot.UUCP> al@mot.UUCP (Al Filipski) writes: > >Can anyone explain to me the marketing purpose behind coupons and >rebates? Why do manufacturers want people to do the idiot-level >work of cutting out and organizing coupons, or, worse yet, filling >out rebate applications and sending them in in return for little >checks in the mail? WHY DON'T THEY JUST LOWER THE %&##@! PRICES? >How stupid and idle do they think people are? How much time is spent >in this country in the utterly non-productive non-creative activities >of clipping, handling, processing, mailing, etc. these stupid pieces of paper? I realize that this (my) posting is in poor taste -- trying to answer a question from net.flame, but what the hey, it's Monday. The vast majority of people don't clip/save/use coupons. Thus, the company isn't out much for redeeming them. They do get publicity/recognition for providing them, however. When you see that the makers of product XYZ are so nice that they are willing to give you money, that registers "points" for them, even if subconsciously, while your conscious mind knows that you will never cash in on their generosity. The few who do use coupons often get noticed -- two weeks worth of groceries for $2.37, and the like. More good press, damn little cost ... Lowering the price 0.000372%, or whatever the equivalent amount is, doesn't get noticed, let alone make them their "points". FROM: Brian G. Gordon, CAE Systems Division of Tektronix, Inc. UUCP: tektronix!teklds!cae780!gordon {ihnp4, decvax!decwrl}!amdcad!cae780!gordon {nsc, hplabs, resonex, qubix, leadsv}!cae780!gordon *UNTIL THE MOVE* USNAIL: 1333 Bordeaux Drive, Sunnyvale, CA 94089 AT&T: (408)745-1440 *AFTER THE MOVE* USNAIL: 5302 Betsy Ross Drive, Santa Clara, CA 95054 AT&T: (408)727-1234 Down 56 1/2 pounds, and counting ...
minow@decvax.UUCP (Martin Minow) (09/10/85)
Another reason companies use coupons is to test the pulling power of the various advertising media -- if 10% of the coupons come from Pravda, and 90% from Trud, the advertiser gets a good idea as to where to place future advertisements. Martin.
daw1@rduxb.UUCP (WILLIAMS) (09/10/85)
I don't know why rebates exist. I agree lowering the price would be better. But... I'd like to kill some of those flunkie beancounters that design these offers. After saving something like 6 "proof of purchase cutouts" from the boxes of some crap, my wife gives them to me. I get out the coupon you need to send along with your proofs of purchase. Well the very fine print on the coupon says to send six f*ing UPC (bar code) symbols! Why do they even put these cute "proof of purchase cutouts" on the damn box if they want you to send in something else? Of course the garbage man took away those other five boxes weeks ago, so I didn't get my damn toy after all that work :-( Doug Williams AT&T Bell Labs Reading, PA mhuxt!rduxb!daw1
btb@mtuxo.UUCP (Bruce Burger) (09/10/85)
> Can anyone explain to me the marketing purpose behind coupons and > rebates? Potential customers who are most price-sensitive tend to be the types who use coupons. Meanwhile, those who don't care, pay the regular price. This brings the seller closer to the ideal situation, where each sale is for <<1 cent less than the maximum the particular customer is willing to pay. (By contrast, the ideal situation for the customer is where each sale is for <<1 cent more than the minimum the particular seller is willing to accept.) --Bruce Burger AT&T Information Systems Freehold, NJ {...ihnp4!}mtuxo!btb
king@kestrel.ARPA (09/10/85)
As I remember... Rebating first became popular shortly after Nixon imposed and then withdrew price controls. It seemed to me at the time that they wanted to avoid being cought with their prices down if price controls were ever reimposed. If they lower prices temporarily, they are stuck with those lower prices if the temporary reduction period includes the effective date of price controls (which was, in the Nixon case, weeks before the announcement). If they instead give a rebate ofer with an expiration date, it is reasonable to suppose that they would be permitted to let the offer expire, at least if the practice wasn't too popular. Seems likely to me that if price controls were ever reimposed rebates in effect on the effective date of the controls would probably have to be continued, however, in the current climate.
mcb@hpfcla.UUCP (09/10/85)
Re: Coupon Rebates I agree with the reasons that I have seen here so far but I have always thought (without factual data) that since you have to include your address that the company used that to extract some demographical data for marketing purposes. I also think that there is a non-zero possibility of the company giving your name/addr out to mail order companies or the like... Mike Berry, hpfcla!mcb
rjb@akgua.UUCP (R.J. Brown [Bob]) (09/10/85)
Remember, modern day rebates were born in the "price
freeze" atmosphere of the early seventies. It is good
from a seller's point of view to have a multi-tiered
pricing system that allows a very high retail price
which they can discount with various gimmicks. Then
if some future Retched Nixon comes along and freezes
prices, the seller can whip out the catalog with the
top prices in it.
Bob Brown {...ihnp4!akgua!rjb}bobn@bmcg.UUCP (Bob Nebert) (09/10/85)
> > Another reason companies use coupons is to test the pulling power > of the various advertising media -- if 10% of the coupons come > from Pravda, and 90% from Trud, the advertiser gets a good idea > as to where to place future advertisements. > > Martin. WHERE??????? Do you place future advertisements in the 10% area, trying to bolster sales, knowing the 90% area will support itself or say 10% is not worth the investment and cultivate the 90% more, knowing it is a good area?
copp@petrus.UUCP (09/11/85)
Conair, who manufactures hair dryers and similar small appliances, makes heavy use of rebates. Their whole price structure relies upon the fact that their return rate is only about 20%. I kind of like this, because it means that the people who don't get their act togther to claim the rebate are subsidizing my purchases. (Now where did I leave that receipt...)
canopus@amdahl.UUCP (Alpha Carinae) (09/11/85)
References: <243@mot.UUCP> (Alan Filipski) > Can anyone explain to me the marketing purpose behind coupons and > rebates? (...) > How stupid and idle do they think people are? (...) It's simple, really. They know that approximately 70% of the people are too stupid and idle to bother to send in for the rebate, coupon, etc, so it's a way of making even more money. You see, if they just charged the lower price for the product, then everyone who bought it would "benefit". But by charging a higher price, and offering to give part of it back if you send something to them, they know that they will only have to pay off around 30% of the people who buy the product. A similar gimmick that relies on the stupidity and slothfulness of humankind is the one where they will send you the first book free of a series, then send you, at regular intervals, the remaining books in the series, accompanied with an invoice. Of course, if you don't want the book, just send it back! Likewise, they know that most people will keep the damn thing and pay for it, or if they do cancel, they are too lazy to return the book, so they pay for it and write "CANCEL" on the invoice. -- Frank Dibbell (408-746-6493) ...!{ihnp4,cbosgd,sun}!amdahl!canopus Amdahl Corporation, Sunnyvale CA [This is the obligatory disclaimer..] - - - - - - - - - - - - - - - - - - - - - - - "This is the biggest fool thing we have ever done. The bomb will never go off, and I speak as an expert in explosives." [Adm Bill Leahy to President Truman in 1945 about the Manhattan Project]
frodo@wcom.UUCP (Jim Scardelis) (09/11/85)
> > Can anyone explain to me the marketing purpose behind coupons and > rebates? Why do manufacturers want people to do the idiot-level > work of cutting out and organizing coupons, or, worse yet, filling > out rebate applications and sending them in in return for little > checks in the mail? WHY DON'T THEY JUST LOWER THE %&##@! PRICES? > How stupid and idle do they think people are? How much time is spent > in this country in the utterly non-productive non-creative activities > of clipping, handling, processing, mailing, etc. these stupid pieces of paper? > Alan Filipski, UNIX group, Motorola Microsystems, Tempe, AZ U.S.A Two major reasons: 1) Coupons - can be used for market research to determine the effectiveness of the newspaper/magazine ad the coupon appeared in. 2) Rebates - rebates are very profitable to the company, because, they typically have sold the items to the dealers several months before the rebates start coming in. During this time, they get to keep the money that will be rebated in an interest-bearing account, making lots of money. That's why alot of rebates take 8-10 weeks to get to you, too. Therere are a couple of minor reasons, too, psychologically, people like coupons, because they feel as though they're getting a bonus that other people aren't. By the way, there are some companies out there that have started putting coupon dispensers in stores. My local A & P has one. You put in *any* magnetic-stripe card, choose which coupons you want, and they are printed on-the-spot. -- Jim Scardelis SA, wcom Usenet: {vax135|ihnp4}!timeinc!wcom!frodo #include <favorite disclaimer>
terryl@tekcrl.UUCP (09/11/85)
> > Can anyone explain to me the marketing purpose behind coupons and > rebates? Why do manufacturers want people to do the idiot-level > work of cutting out and organizing coupons, or, worse yet, filling > out rebate applications and sending them in in return for little > checks in the mail? WHY DON'T THEY JUST LOWER THE %&##@! PRICES? > How stupid and idle do they think people are? How much time is spent > in this country in the utterly non-productive non-creative activities > of clipping, handling, processing, mailing, etc. these stupid pieces of paper? It's a matter of simple economics, really. Manufacturers realize that most people won't bother to send in the coupons, applications, etc. to get a rebate, so it's financially beneficial to the manufacturer to do this. If they just lowered the prices, then everyone would be participating in the "rebate program", and it would cost the manufacturers more.
todd@scirtp.UUCP (Todd Jones) (09/12/85)
> Can anyone explain to me the marketing purpose behind coupons and > rebates? Why do manufacturers want people to do the idiot-level > work of cutting out and organizing coupons, or, worse yet, filling > out rebate applications and sending them in in return for little > checks in the mail? WHY DON'T THEY JUST LOWER THE %&##@! PRICES? > How stupid and idle do they think people are? How much time is spent > in this country in the utterly non-productive non-creative activities > of clipping, handling, processing, mailing, etc. these stupid pieces of paper? My Theory: Most people throw coupons away, therefore prices couldn't be lowered anywhere near the level of the coupon discount. The companies are trying to get you to try something because it is cheap, realize what a great product it is and buy it from now until you die. This coupon discount is a small sacrifice for a comany who stands to gain a lifetime of loyalty from your average gullible American consumer. Sure, companies get dismayed at people who are experts in couponology, since these types defeat the purpose of coupons, but it's still worth the hassle. a note: unless you clip pretty fast, coupon clipping must not pay very well. ||||||| || || [ O-O ] Todd Jones \ ^ / {decvax,akgua}!mcnc!rti-sel!scirtp!todd | ~ | |___| SCI Systems Inc. doesn't necessarily agree with Todd.
edg@micropro.UUCP (Ed Greenberg) (09/12/85)
In article <243@mot.UUCP> al@mot.UUCP (Al Filipski) writes: > >Can anyone explain to me the marketing purpose behind coupons and >rebates? ... Perhaps one reason is that the rebate makes you think you're getting something for nothing. 'Course, you aren't, but it looks that way. Another reason is that the intent is to get you to buy the product over a lower priced competitor due to the rebate, and then you don't send for the rebate because it's too much trouble. Also, the terms of the rebate must be followed exactly. This is not always easy. A recent article in the SF Chronicle (barf gag) on this subject told of a powdered product sold in a large can (like bulk chocolate powder or coffee or the like.) The rebate certificate was buried on the bottom of the can. When you finally got down there, you discovered that you needed the original cash register receipt in order to claim the rebate. Too bad, sucker! Bottom line for me: I buy the store's "house brand." Here in CA, when you shop the smaller supermarkets, the brand is "Bonnie Hubbard." Safeway's is "Scotch Buy" and A&P was always "Ann Page." Usually, a house brand is cheaper than the equivelent national brand EVEN WITH rebates and coupons. In only one instance have I been less satisfied with the house brand over the "name" brand. -- -edg UUCP: {hplabs,dual,ptsfa}!well!micropro!edg
gm@trsvax (09/13/85)
60 Minutes did an article on rebates a while back. They went to a big clearing house which handles the rebates for lots of companies, and did an interview with a fellow who manages the operation. They ask the very same question to that fellow. What it boils down to is, if the manufacturer has a choice of lowering the price by $1 or offering a $1 rebate, he will choose the rebate. Why? Because it has been proven that whereas maybe 80% of the people who buy that brand buy it because of the rebate, only 30% will ever take the trouble to mail in the rebate slip. So the manufacturer has just made quite a bit of profit at a low cost. ----------------------------------------------------------------------------- "I don't want to see you in here again, McFly. So why don't you make like a tree and get outta here?" ------------ George Moore (gm@trsvax.UUCP)
showard@udenva.UUCP (showard) (09/19/85)
> > Can anyone explain to me the marketing purpose behind coupons and > rebates? Why do manufacturers want people to do the idiot-level > work of cutting out and organizing coupons, or, worse yet, filling > out rebate applications and sending them in in return for little > checks in the mail? WHY DON'T THEY JUST LOWER THE %&##@! PRICES? > How stupid and idle do they think people are? How much time is spent > in this country in the utterly non-productive non-creative activities > of clipping, handling, processing, mailing, etc. these stupid pieces of paper? > > -------------------------------- > Alan Filipski, UNIX group, Motorola Microsystems, Tempe, AZ U.S.A > {seismo|ihnp4}!ut-sally!oakhill!mot!al > ucbvax!arizona!asuvax!mot!al > -------------------------------- They do it for the very reason that you mention. Because it is a hassle, most consumers do not use coupons, so most of the sales are at full price. This also explains how Colorado Safeways and King Soopers can offer Triple Coupons. --Mr. Blore, the DJ who would not die.
elric@proper.UUCP (elric) (09/19/85)
<><><> The reasoning behind rebates in rather interesting. Alot of people will buy a product that offers a rebate, but not read the fine print. Co wins $$$ because you get no rebate. or You read fine print & do everything right & get the $0.50 to 5.00 rebate. The Co still wins. Instead of lowering prices they have gotten you to wait 3 months for a rebate. All that time, they are earning interest. If everyone took advantage of rebates it would proably kill the average co. Elric
herbie@polaris.UUCP (Herb Chong) (11/10/85)
In article <243@mot.UUCP> al@mot.UUCP (Al Filipski) writes: >Can anyone explain to me the marketing purpose behind coupons and >rebates? Why do manufacturers want people to do the idiot-level >work of cutting out and organizing coupons, or, worse yet, filling >out rebate applications and sending them in in return for little >checks in the mail? WHY DON'T THEY JUST LOWER THE %&##@! PRICES? they aren't out to save you money, they're out to find out what you want to buy. market research is one of the reasons why coupons are used. Herb Chong... I'm still user-friendly -- I don't byte, I nybble.... VNET,BITNET,NETNORTH,EARN: HERBIE AT YKTVMH UUCP: {allegra|cbosgd|cmcl2|decvax|ihnp4|seismo}!philabs!polaris!herbie CSNET: herbie.yktvmh@ibm-sj.csnet ARPA: herbie.yktvmh.ibm-sj.csnet@csnet-relay.arpa ======================================================================== DISCLAIMER: what you just read was produced by pouring lukewarm tea for 42 seconds onto 9 people chained to 6 Ouiji boards.
wrc@whuts.UUCP (CLEGG) (11/20/85)
> In article <243@mot.UUCP> al@mot.UUCP (Al Filipski) writes: > >Can anyone explain to me the marketing purpose behind coupons and > >rebates? Why do manufacturers want people to do the idiot-level > >work of cutting out and organizing coupons, or, worse yet, filling > >out rebate applications and sending them in in return for little > >checks in the mail? WHY DON'T THEY JUST LOWER THE %&##@! PRICES? > > they aren't out to save you money, they're out to find out what > you want to buy. market research is one of the reasons why > coupons are used. > > Herb Chong... > If manufacturers were trying to do market research by using coupons I don't think they would be getting very realistic results because people think they are saving money when they buy a product using a coupon. If the coupon didn't exist, I bet the person wouldn't even consider the purchase.
danz@hplsla.UUCP (danz) (11/26/85)
Coupons are a mystery to me . . .
Rebates, however, are a quite understandable device. Lo, a parable:
X sees a rebate announcement in <enter favorite media here>.
"Hum", X thinks, "Wanted this anyway. I'll buy it, send in the
rebate, make big bucks"
So, X buys it.
Period.
Chances are better than even that X will never send in the rebate.
Thus, more than 50% of the time, the manufacturer sells the product at
full price.
Dan.
"The above and aforementioned text of questionable value was generated
solely by a lightning strike in Stubble Forks, Iowa on July 30, 1943."